As part of the Brexit legislation published yesterday we now have The International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations 2020, which will be of interest to anyone worried about DAC6.
The key provision in these regulations states that:
"(5) For the purposes of these Regulations, the DAC is to be read as if—
(h) in Annex IV, Part 1 [the Main Benefit Test] and hallmark categories A, B, C and E in Part II were omitted.”
The Hallmark category that is being retained is Hallmark D, which is the Hallmark concerning automatic exchange of information and beneficial ownership (not one of the Hallmarks that has been creating the most concern).
This is an interesting move given that the Chancellor of the Exchequer’s January 2020 report to Parliament on the Regulations indicated that once the transition period ends, although the government may make transitional arrangements, amend or revoke the Regulations, it would make sure that the rules would work as intended.
It may be that the decision has been taken that the UK's existing Disclosure of Tax Avoidance Scheme (DOTAS) rules obtain the same result without placing people under an excessive administrative burden. If this is the case, this is a welcome shift in focus.
(5) For the purposes of these Regulations, the DAC is to be read as if (h) in Annex IV, Part 1 [the Main Benefit Test] and hallmark categories A, B, C and E in Part II were omitted.